SUMMER INTERNSHIP

PROJECT REPORT
ON
“ITR E-FILING”
Session 2020-2022
Subject Code:KMBN308

SUBMITTED BY:

Student’s Name: SUMIT RANJAN

Roll No: 2008010700238
Section: ‘D’
 G. L. BAJAJ
INSTITUTE OF MANAGEMENT & RESEARCH
GLBIMR Approved by A.I.C.T.E. & affiliated to Dr. A.P.J. Abdul Kalam Technical University

Dated:

CERTIFICATE

This is to certify that SUMIT RANJAN has undertaken this Summer

Internship project work entitled “ITR E-FILING” for the partial
fulfilment of the award of Master of Business Administration degree
from Dr. A P J Abdul Kalam Technical University, Lucknow (U. P.).

As per best of my knowledge this Mini project work is an original

piece of work and has not been submitted or published elsewhere.

I wish him/ her all the best for his/her bright future ahead.

Project Supervisor

Department of Management Studies

 G. L. BAJAJ
INSTITUTE OF MANAGEMENT & RESEARCH
GLBIMR Approved by A.I.C.T.E. & affiliated to Dr. A.P.J. Abdul Kalam Technical University

Dated:

CERTIFICATE

This is to certify that SUMIT RANJAN has undertaken this Summer

Internship project work entitled “ITR E-FILING” for the partial
fulfilment of the award of Master of Business Administration degree
from Dr. A P J Abdul Kalam Technical University, Lucknow (U. P.).

As per best of my knowledge this Mini project work is an original

piece of work and has not been submitted or published elsewhere.

I wish him/ her all the best for his/her bright future ahead.

Dean-MBA

Department of Management Studies

 Declaration

I Sumit Ranjan, hereby declare that the Internship work title “ITR E-
FILING” completed & submitted in partial fulfilment of the award of
the degree of “Master of Business Administration” by G.L. Bajaj
institute of management and research and the work was carried out
with the help and under guidance of “PRIYA SHUKLA” and staff of
the “VFN GROUPS”.

I further declare this Internship report has not formed the basis for
the award of any other Degree/Diploma of any other
University/Institution.

Date:

Name: Sumit Ranjan

Roll No: 2008010700238
MBA (2020-22)
 Acknowledgement

A task undertaken without offering prayers to almighty and talking

blessings from the elders is not a good beginning. Likewise, the work
completed without acknowledging the assistance to those who were
always by my sides to make to make my efforts fruitful in the task
left incomplete.

I convey my sincere thanks to, Dr. Mukul Gupta (Director, GL Bajaj

Institute of Management), for providing me the proper guidance, for
providing me the proper guidance for providing me the opportunity
to carry out my Summer Research Project effectively and efficiently. I
would also like to pay thanks to my Institute and faculty members for
cooperating with me and helping me to complete the project.
 CONTENT
PARTICULARS Pg NO.

INTRODUCTION 8
(Objectives, mission & policies)
COMPANY PROFILE 10

BASIC INTRODUCTION ABOUT TAX 12

TAXABLE HEAD OF INCOME TAX 20

TAX BENEFITS 25

INCOME TAX E-FILING 37

SILENT FEATURES 39

STATEMENT OF PROBLEMS 41

NEED TO STUDY 42

RELEVENCE AND IMPORTANCE OF STUDY 42

ASSUMPTIONS 43

TYPES OF E-FILING 44

PROCESS OF E-FILING 46

SUMMARY OF LEARNING EXPERIENCE 58

CONCLUSION 59

BIBLIOGRAPHY 60
INTRODUCTION:
E-filing is a system for submitting tax
documents to the income tax department through the internet or
direct connection, usually without the need to submit any paper
documents. Various tax return preparation soft wares with e-
filing capabilities are available as standalone commercial use. E-
file is the term for electronic filing, or sending your ITR from tax
software via the Internet to the tax authority.

E-filing of Income tax return online refers to the process of filing

Income Tax electronically. Now no longer have to stand in long
queues and no waiting for deposits. Customized return forms
have been devised by the Income Tax Authority which is available
on the site of the department. These forms have been devised
with such details that tax payers need not file any supporting
document along with.

INCOME TAX:

In the modern times, income tax is an annual tax

on income. The Indian Income Tax Act (Section 4) provides that in
respect of the total income of the previous year of every person,
income tax shall be charged for the corresponding assessment
year at the rates laid down by the Finance Act for that assessment
year. Section 14 of the Income Tax Act further provides that for
the purpose of charge of income tax and computation of total
income all income shall be classified under the following heads of
income: salaries, income from house property, profits and gains of
business or profession, capital gains, income from other sources.

The total income from all the above heads of income is calculated
in accordance with the provisions of the Act as they stand on the
first day of April of any assessment year. The Income Tax
Department is responsible for all activities related to the taxation
process.

The Income Tax Department is governed by the Central Board for

Direct Taxes (CBDT) and is part of the Department of Revenue
under the Ministry of Finance, Government of India.
OBJECTIVE:

 To find the market potential and market penetration of financial product

offerings and local area nearby them.

 To collect the real time information about preference level of customers

and give the best solution

 To expand the market penetration on financial service

 To increase the product awareness of VFN as single window shop for

investment solutions.

MISSION:

Financial Services provides excellence in client service and compliance through

our unwavering commitment to our staff, our understanding of university
operations, and a continued focus on process improvement.

VISION:

Financial Services will be recognized as proactive, results-oriented leaders who

work in collaboration with their clients to offer excellence in operational and
strategic financial management to support the achievement of VFNs
objectives.
 COMPANY PROFILE:

VFN GROUP

VFN is one of the oldest and a renowned Financial Advisory Firm in

Delhi. VFN Group offer all types of Financial Products under one roof.
The Management team has more than 20 years of experience in
financial sector.

TAX ADVISORY

TIME & PROCESS

ONLINE FILING SERVICE

TAX CALCULATORS

GST Registration/ Return Filing

What we offer:

o Complete Financial Planning & Investments solution

o True client-focused, need-based investment advisory services

o Top quality products for managing investments

o E Filing and Tax consultancy

Our Philosophy:

o We believe in long-term wealth creation for our clients.

o We believe in Asset Allocation principle for wealth creation.

o We are not guided by the short-term profit making, timing

markets, etc we do not believe in them.

o We believe that mutual funds, as an investment product, can

be effectively used to successfully meet the different needs of
different clients.

o Provide clients with solutions that truly meet their needs and
have high quality products and services, better that anyone else
can provide.
BASIC INFORMATION ABOUT TAX

Taxes in India are of two types, Direct Tax and Indirect Tax.

Direct Tax, like income tax, wealth tax, etc. are those whose burden
falls directly on the taxpayer.

The burden of indirect taxes, like service tax, VAT, etc. can be passed
on to a third party.

Income Tax is all income other than agricultural income levied and
collected by the central government and shared with the states.
According to Income Tax Act 1961, every person, who is an assessee
and whose total income exceeds the maximum exemption limit, shall
be chargeable to the income tax at the rate or rates prescribed in the
finance act. Such income tax shall be paid on the total income of the
previous year in the relevant assessment year.
The total income of an individual is determined on the basis of his
residential status in India.

INCOME TAX RETURN

Income Tax Return" is a term which is often used when we talk about
income tax. It is a way by which we pay this tax. When total annual
income of a person, including all sources, is more than maximum
unchangeable limitation (At present it is Rs. 1,50,000/-) then that
person is liable to pay income tax.

According to Income Tax Act 1961, every person, who is an assessee

and whose total income exceeds the maximum exemption limit, shall
be chargeable to the income tax at the rate or rates prescribed in the
finance act.
Residence Rules

An individual is treated as resident in a year if present in India

for 182 days during the year or for 60 days during the year and 365
days during the preceding four years. Individuals fulfilling neither of
these conditions are non-residents. (The rules are slightly more
liberal for Indian citizens residing abroad or leaving India for
employment abroad.)

A resident who was not present in India for 730 days during the
preceding seven years or who was non-resident in nine out of ten
preceding yeas I treated as not ordinarily resident. In effect, a
newcomer to India remains not ordinarily resident.

For tax purposes, an individual may be resident, non-resident or not

ordinarily resident.

Non-Residents and Non-Resident Indians

Residents are on worldwide income. Non-residents are taxed only on

income that is received in India or arises or is deemed to arise in
India. A person not ordinarily resident is taxed like a non-resident but
is also liable to tax on income accruing abroad if it is from a business
controlled in or a profession set up in India.

Capital gains on transfer of assets acquired in foreign exchange is not

taxable in certain cases.

Non-resident Indians are not required to file a tax return if their

income consists of only interest and dividends, provided taxes due
on such income are deducted at source.
It is possible for non-resident Indians to avail of these special
provisions even after becoming residents by following certain
procedures laid down by the Income Tax act.

Taxability of individuals is summarized in the table below

Status Indian Income Foreign Income

Resident and ordinarily resident Taxable Taxable

Resident but not ordinary resident Taxable Not Taxable

Non-Resident Taxable Not Taxable

Know-how of Income Tax

 Income tax is levied on the 'total income' of the assessee.

 Income of the 'previous year' is taxed in the 'assessment year.'
 Income is classified into and computed under five categories
called 'heads of income.'
 The basic scheme of income tax is the principle 'pay as you
earn.'
 One must pay his taxes in advance and by the due dates, in the

prescribed percentages.
 Deferment in the payment of advance tax would result in the payment
of interest.
The income tax basic scheme is explained in brief as:

Income tax is levied on the 'total income' of the assessable entity

which is computed under the provisions of the Act.

The income which are pertaining to the 'previous year' is taxed, but
in the 'assessment year.'

Income tax is charged at the rates being fixed by the for the year by
the annual Finance Act. But the liability to pay the tax is based on the
principle 'pay as you earn.'

Also check Taxable Heads of Income for the definition of salary,

wages, pension, allowance, etc.

Pay as you Earn

A person is not allowed to wait until 31 March to pay his/her taxes.
The Income Tax Act has the provision of 'pay as you earn.' This do
not pinch a tax payer at the end of the year making a lump sum
payment. Such payments

PERSONAL TAX RATES

For individuals, HUF, Association of Persons (AOP) and Body of

individuals (BOI):
For the Assessment Year 2021-22

Taxable income slab (Rs.) Rate (%)

0-2,50,000 NIL

2,50,000-3,00,000 5% (tax rebate u/s 87a is

3,00,000-5,00,000 available

5,00,000-7,50,000 10%

7,50,000-1,00,000 15%

1,00,000-12,50,000 20%

12,50,000-15,00,000 25%

>15,00,000 30%

*A surcharge of 10 per cent of the total tax liability is applicable

where the total income exceeds Rs 1,000,000.
Note : -

Education cuss is applicable @ 3 per cent on income tax, inclusive of

surcharge if there is any.

A marginal relief may be provided to ensure that the additional IT

payable, including surcharge, on excess of income over Rs 1,000,000
is limited to an amount by which the income is more than this
mentioned amount.

Agricultural income is exempt from income-tax.

TDS (Tax deducted at source)
This tax is deducted at the source of income, by the employer or the
payer and paid to the government. It includes salary, interest,
commission and contract fees, rent, professional fees, etc. This type
of deduction is popularly known as TDS. Such tax is subject to certain
limits and certain conditions. For example, if the earning up on fixed
deposit is Rs. 5,000 in a bank, TDS at 10% and education cues at 2%
i.e. a total of 10.2% will be deducted at the time of credit or at the
time of payment, whichever is earlier.

In case of senior citizen, if he/she estimates that the tax on the

income is nil, Form No.15H duly filled and signed is to be submitted
in duplicate to the bank. So, no TDS will be deducted. If the total
income is less than the threshold limit, Form No.15G is to be
submitted to the payer to prevent TDS from such interest.

TCS (Tax collected at source)

Unlike tax deducted at source, TCS is collected by a seller of certain
specified goods at the specified rates on the purchase of the goods
and it is remitted to the treasury on behalf of the buyer. In the same
way, a person granting a lease or license in a parking lot, toll-plaza,
etc. collects the taxes at the specified rates as tax paid on behalf of
the lessee.

Advance Tax
Advance Tax is paid by the income earned during the previous year.
The computing of the liability of advance tax is done by estimating
the 'total income' for the year, calculating the surcharge and taking
into consideration the rebate that will be available. The advance tax
is required to be paid in three instalments.
Schedule of Advance Tax:

On or before 15
A Not less than 30% of advance tax.
September

On or before 15 Not less than 60% of advance tax as

B
December reduced by amount paid earlier.

Full advance tax as reduced by the

On of before 15
C amount or amounts if any, paid in earlier
March
instalments.

If the assessee does not pays the advance tax as described above, an
interest of 1% is charged per month for 3 months for the deferment
of advance tax instalment. If the total amount of advance tax is not
paid on or before 15 March, an interest of 1% is charged for one
month.

Further, if the total advance tax paid is less than 90% of the advance
tax payable, the interest at 1% per month is charged for the shortfall
in the advance tax paid for the period commencing from 1 April of
the assessment year and ending on the date of payment or
assessment, whichever is earlier.
Income Tax Rates Across the World

Country Personal Income Tax Rate

Australia 0% - 48.5%

Canada 16% - 29%

Estonia 24% - 24%

Denmark 44% - 63%

Hong Kong 0% - 33%

India 0% - 33%

Israel 10% - 49%

Malaysia 0% - 29%

Mexico 3% - 32%

Russia 13% - 13%

Singapore 0% - 22%

UK 0% - 40%

US 10% -35%
TAXABLE HEAD OF INCOME TAX

The total income of a person is divided into five heads, viz., taxable.

1. Income from Salary

2. Income from House Property
3. Income from profits and gains of Business or Profession
4. Income from Capital Gains
5. Income from Other sources

 Salary Income: -

In certain cases, an employee can claim both HRA (house

rent allowances) as well as interest on housing loan.

 House property Income: -

if interest paid for property given on rent is less than

taxable rent (after standard deduction -30%). Such loss can be set off
against income from other heads including income from salary.

 Income from capital gain: -

surplus from derivative contracts is non- speculation.

Archaeological collection, Drawings, Painting, Sculptures, Any other
work of Art. Thus, now any surplus received from sale of these
articles would be liable to tax under the head capital gain.

 Business income: -

Any type of income received from business

  Income from other sources: -

Dividend, Commission, lotteries, crossword puzzles, races

including horse races, card games, any sort or from gambling or
betting

Individual Heads of Income

Income from Salary

All income received as salary under Employer-Employee relationship

is taxed under this head. Employers must withhold tax compulsorily,
if income exceeds minimum exemption limit, as Tax Deducted at
Source (TDS), and provide their employees with a Form 16 which
shows the tax deductions and net paid income. In addition, the Form
16 will contain any other deductions provided from salary such as:

 Medical reimbursement: Up to Rs. 15,000 per year is tax free if

supported by bills. (Company pays Fringe Benefit Tax on this
amount)
 Conveyance allowance: Up to Rs. 800 per month (Rs. 9,600 per
year) is tax free if provided as conveyance allowance. No bills
are required for this amount.
 Professional taxes: Most states tax employment on a per-
professional basis, usually a scabbed amount based on gross
income. Such taxes paid are deductible from income tax.
 House rent allowance: the least of the following is available as
deduction
 actual HRA received
 50%/40%(metro/non-metro) of 'salary'
 rent paid minus 10% of 'salary'. Salary for this purpose is
basic+DA forming part+commission on sale on fixed rate.
Income From House property

Income from House property is computed by taking what is called

Annual Value. The annual value (in the case of a let out property) is
the maximum of the following:

 Rent received
 Municipal Valuation
 Fair Rent (as determined by the I-T department)

If a house is not let out and not self-occupied, annual value is

assumed to have accrued to the owner. Annual value in case of a self
occupied house is to be taken as NIL. (However if there is more than
one self occupied house then the annual value of the other house/s
is taxable.) From this, deduct Municipal Tax paid and you get the Net
Annual Value. From this Net Annual Value, deduct :

30% of Net value as repair cost (This is a mandatory deduction)

Interest paid or payable on a housing loan against this house

In the case of a self occupied house interest paid or payable is

subject to a maximum limit of Rs,1,50,000 (if loan is taken on or after
1 April 1999) and Rs.30,000 (if the loan is taken before 1 April 1999).
For all non self-occupied homes, all interest is deductible, with no
upper limits.

The balance is added to taxable income.

Income from Business or Profession

carry forward of losses

An example .. An architect works out of home and co-ordinates work

for his clients. All the following expenses would be deductible from
his professional fees.

 he uses a computer,
 he travels to sites in his car,
 he has a peon to help him collect payments
 He has a maid who comes in daily
 part of the society maintenance bills
 entertainment expenses incurred..
 books and magazines for his professional practice.

The income referred to in section 28, i.e, the incomes chargeable as

"Income from Business or Profession" shall be computed in
accordance with the provisions contained in sections 30 to 43D.

The computation of income under the head "Profits and Gains of

Business or Profession" depends on the particulars and information
available.

Income from Capital Gains

Transfer of capital assets results in capital gains. A Capital asset is
defined under section 2(14) of the I.T. Act, 1961 as property of any
kind held by an assessee such as real estate, equity shares, bonds,
jewellery, paintings, art etc. but does not include some items like any
stock-in-trade for businesses and personal effects. Transfer has been
defined under section 2(47) to include sale, exchange,
relinquishment of asset, extinguishment of rights in an asset, etc.
Certain transactions are not regarded as 'Transfer' under section 47.
For tax purposes, there are two types of capital assets: Long term
and short term. Long term asset are held by a person for three years
except in case of shares or mutual funds which becomes long term
just after one year of holding. Sale of such long term assets gives rise
to long term capital gains. There are different scheme of taxation of
long term capital gains. These are:

As per Section 10(38) of Income Tax Act, 1961 long term capital gains
on shares or securities or mutual funds on which Securities
Transaction Tax (STT) has been deducted and paid, no tax is payable.
STT has been applied on all stock market transactions since October
2004 but does not apply to off-market transactions and company
buybacks; therefore, the higher capital gains taxes will apply to such
transactions where STT is not paid.

In case of other shares and securities, person has an option to either

index costs to inflation and pay 20% of indexed gains, or pay 10% of
non indexed gains. The indexation rates are released by the I-T
department each year.

In case of all other long term capital gains, indexation benefit is

available and tax rate is 20%.

All capital gains that are not long term are short term capital gains,
which are taxed as such:

Under section 111A, for shares or mutual funds where STT is paid,
tax rate is 10% From Asst Yr 2005-06 as per Finance Act 2004. For
Asst Yr 2009-10 the tax rate is 15%.

In all other cases, it is part of gross total income and normal tax rate
is applicable.

For companies abroad, the tax liability is 20% of such gains suitably
indexed (since STT is not paid).
Income from Other Sources
This is a residual head, under this head income which does not meet
criteria to go to other heads is taxed. Also there are also some
specific incomes which are to be taxed under this head.

 Income by way of Dividends

 Income from horse races
 Income from winning of lotteries
 Income from winning bull races
 Any amount received from key man insurance policy.
 Any sort or from gambling or betting
 Income from commission
 Income from crossword puzzles
 Income from card games

Income Exempt from Tax

Sections 10,10A, 10AA, 10B, 10BA, and 13A deal with income which
does not form part of an assessee's total income. While section 10
provides a list of income absolutely exempt from tax, sections 10A,
10AA, 10B, 10BA, and 13A deal with specific exemptions available to
newly established industrial undertakings in free trade zones, and
political parties. These exemptions are provided from social, political,
Constitutional considerations, for avoiding double taxation, on the
basis of casual and non-recurring nature ,on the basis of non-
residents and non-citizens status, on the basis of Certain specific
securities, bonds, certificates, funds and the like, on the basis of
Education, science, research, achievements, rewards, sports, charity,
on the basis of certain types of bodies, funds and institutions,
Subsidies to promote business, and international, economic, and
other considerations. Sikkim is the only state of India where citizens
do not pay income tax. Residents of Sikkim are eligible for this
exemption but excluding the non-Sikkimese spouse of a Sikkimese.

Agricultural Income [Section 10(1)] Eligible Assesses :- All assesses

Exempt income :- Agricultural income Other points :- Agricultural
income means as it is defined in Section 2(1A) In case of individual,
HUF, AOP, BOI, unregistered firms and artificial juridical persons,
agricultural income is to be aggregated for the purpose of
determining the rate of tax on Non-Agricultural income and they
would get tax rebate or relief.
Dividends
Dividend income (as referred u/s 115-O of the I.Tax Act) paid by
Companies and Mutual Funds are exempt from tax. A 15% dividend
distribution tax and surcharge of 3% is paid by companies before
distribution. Equity mutual funds (with more than 65% of assets
invested in equities) do not pay a dividend distribution tax, though
other funds do. Liquid and Money Market funds pay 25% dividend
distribution tax.01123

Other Exempt Income

The Indian Income tax act specifically exempts certain income from
tax:

Money received from an Insurance company as proceeds of an

insurance policy (by way of an insurance claim, or by maturity) is
generally exempt. However there are three types of payments under
life insurance policy that are not tax free . These are :

1. any sum received under sub-section (3) of section 80DD or sub-

section (3) of section 80DDA - this refers to specific policies for
disabled dependants; or
2. any sum received under a Keyman insurance policy; or
3. any sum received under policies issued on or after 1 April 2003
where premium paid is greater than 1/5th the sum assured
4. Maturity proceeds of a Public Provident Fund (PPF) account.
Tax Benefits - Deductions, Rebates & Donations

Rebates

Section 80C

Section 80L used to allow deduction of interest earned on, say, a

National Savings Certificate or a bank deposit up to a limit of Rs
12,000. But now all these are gone .In their place has come Section
80C -- "u/s 80CCC, & u/s 80CCD", as the Finance Bill puts it. Thus, the
new Section 80C of the Income Tax Act proposed in Union Budget
gives you a bigger tax break than what the current regime offers.

Deduction in respect of Life Insurance Premium, Contribution to

Provident Fund, etc.

Rs 1 lakh can be invested under this section without any individual

sub-limits except in the case of Rs 10,000 in pension funds.

Sections 88, 80L, 80CCC and 80CCD is clubbed in.

 Schemes eligible for Section 80C

benefits 
 PPF
 ELSS - Mutual Funds
 NSC
 KVP
 Life Insurance
 Senior Citizen Saving Scheme 2004
 Post Office Time Deposit Account
Note: - Section 80CCC is for deduction in respect of contribution to certain
Pension Funds. Section 80L is for deductions in respect to Interest on certain
Securities, Dividends, etc

Sections abolished from Union Budget 2005-06

 88 (Rebate on Life Insurance Premium, Contribution to Provident Fund)

 80L (Deductions in respect to Interest on certain Securities, Dividends,
etc.)
 Note :-
Rebate of Rs 5,000 for women and Rs 20,000 for senior citizens have
been wiped off.

The key features of the new provision

 Exemption available to all taxpayers irrespective of income bracket -

earlier Section 88 did not provide benefit to those having income
exceeding Rs 500,000.
 No exemption/adjustment for interest income
 All saving modes/options under Section 88 covered and also 80CCC and
80CCD covered.

Following benefits will continue irrespective of changes

 Interest paid on housing loan for self-occupied house property.

 Medical insurance premium. (Additional deduction of Rs 15000 u/s 80D
to an individual paying medical insurance premium for his/her parent(s)
 Specified expenditure on disabled dependant.
 Expenses for medical treatment for self or dependant or member of an
HUF.
  Deduction in respect of interest on loans for pursuing higher studies -
Section 80E.
 Deduction to person with disability.

Section 10(33)
Dividends from mutual funds are fully exempt from income tax under Section
10(33). Equity funds (schemes that invest 50 per cent of their funds in equity)
are also exempt from dividend tax. This means that unlike companies, they do
not have to pay tax at the rate of 10.2 per cent on the dividend that they
distribute.

Section 88
Upto 31 March 2005, rebates were available on the tax payable under three
sections.
According to the section, 30 per cent or 20 per cent or 15 per cent of the
amount invested in certain schemes (schemes referred in Section 80C) was
available as a rebate on the tax payable.

 30 per cent of the amount invested was available as rebate only if the
salary income of the individual was less than Rs. 1 lakh and if it
constituted 90 per cent or more of the assessee's gross total income.
 20 per cent of the amount invested was available as rebate if the gross
total income of the individual was less than Rs 1.5 lakh and the case did
not fall under the above mentioned case.
 If gross total income was more than Rs. 1.5 lakh but less than Rs 5 lakh
of the individual, a rebate of 15 per cent of the amount invested was
available.
 If gross total income was more than Rs 5 lakh of the individual, then
there is no rebate.
Section 88B

Under this section, an individual resident in India and above the age of 65
years was allowed to a maximum rebate of Rs. 20,000 on the tax payable.

Section 88C
Under this section a lady resident in India, aged below 65 years, was allowed a
maximum rebate on the tax payable of Rs 5,000.

Section 89 (1)
This is available to an employee when he receives salary in advance or in arrear
or when in one financial year, he receives salary of more than 12 months or
receives 'profits in lieu of salary' W.e.f. 1.6.89, relief u/s 89(1) can be granted
at the time of TDS by employees of all companies co-operative societies,
universities or institutions as well as govt./public sector undertakings. The
relief should be claimed by the employee in Form No. 10E and should be
worked out as explained in Rule 21A of the Income Tax Rules.

Deductions

Section 80CCC

Any individual who makes a contribution for any annuity plan of the Life
Insurance Corporation of India or any other insurer is eligible for a deduction of
the amount paid or Rs. 10,000, whichever is less. When an individual or his
nominee receives any amount under the following circumstances it will be
taxed as the income of the individual or his nominee, in the year of withdrawal
or the year in which the pension is received:

 On the surrender of the annuity plan or

 As pension received from the annuity plan.
Section 80CCD

The deduction for contributions to a pension

scheme of the Central Government is available only to those individual who
have been employed by the central government on or after 1st January 2004,
and will be allowed for any amount deposited in such a pension scheme. But,
in this case, deduction of more than 10 per cent of the employee's salary shall
not be allowed.

The contributions to the fund are also made by the Central Government.
Deduction will be available for any contribution which is made by the Central
Government or 10 per cent of the employee's salary, whichever is less.

When the individual or his nominee receives any amount out of the scheme
which meets the following descriptions, it shall be taxed in the hands of the
recipient.

 On closure/ opting out of the pension scheme; or

 As pension received from the annuity plan.

The term 'salary' here includes Dearness Allowance (if considered for
retirement benefits), but it excludes other allowances and perquisites.
The aggregate deduction under the Sections 80C, 80CCC and 80CCD cannot
exceed Rs 1 lakh as whole.
Section 80D

Any Premium which is paid for medical insurance that has been taken on the
health of the assessee, his spouse, dependent parents or dependent children,
is allowed as a deduction, subject to a ceiling of Rs 10,000.

Where any premium is paid for medical insurance for a senior citizen, an
enhanced deduction of Rs 15,000 is allowed. The deduction is available only if
the premium is paid by cheque.

Section 80DD
Deduction under this section is available to an individual who:

 Incurs any expenditure for the medical treatment, training and

rehabilitation of a disabled dependant; or
 Deposits any amount in schemes like Life Insurance Corporation for the
maintenance of a disabled dependant. An annuity or a lump sum
amount is paid to the dependant or to a nominee for the benefit of the
dependant in the event of the death of the individual depositing the
money, from the said scheme,

A deduction of Rs 50,000 is available. Where the depandant is with a severe

disability, a deduction of Rs 1,00,000 is allowed. (As per AY 2009-10)

If the death of the dependant occurs before that of the assessee, the amount
in the scheme is returned to the individual and is taxable in his hands in the
year that it is received.
An individual should furnish a copy of the issued certificate by the medical
board constituted either by the Central government or a state government in
the prescribed form, along with the return of income of the year for which the
deduction is claimed.

The term 'dependent' here refers to the spouse, children, parents and siblings
of the assessee who are dependant on him for maintenance and who
themselves haven't claimed a deduction for the disability in computing their
total incomes.
This deduction is also available to Hindu Undivided Families (HUF).

Section 80DDB
An individual, resident in India spending any amount for the medical treatment
of specified diseases affecting him or his spouse, children, parents, brothers
and sisters and who are dependant on him, will be eligible for a deduction of
the amount actually spent or Rs 40,000, whichever is less.

Note: - For the complete list of disease specified, refer to Rule 11DD of the
Income Tax Rules.

For any amount spent on the treatment of a dependent senior citizen an

individual is eligible for a deduction of the amount spent or Rs 60,000,
whichever is less is available.

The individual should furnish a certificate in Form 10-I with the return of
income issued by a specialist working in a government hospital.

If any amount of medical expenditure is borne by the employer or is

reimbursed under an insurance scheme, the eligibility of the deduction is the
reduction to that extent. This deduction is also available to Hindu Undivided
Families (HUF).

Section 80E

Under this section, deduction is available for payment of interest on a loan

taken for higher education from any financial institution or an approved
charitable institution. The loan should be taken for either pursuing a full-time
graduate or post-graduate course in engineering, medicine or management, or
a post-graduate course in applied science or pure science.

The deduction is available for the first year when the interest is paid and for
the subsequent seven years. Up to March 2005, deduction was available for
the repayment of principal and interest aggregating to Rs 40,000 a year.

Section 80U
It is deduction in the case of a person with a disability. An individual who is
suffering from a permanent disability or mental retardation as specified in the
persons with disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995 or the National Trust for Welfare of Persons with
Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999,
shall be allowed a deduction of Rs 50,000. In case of severe disability, it is Rs.
75,000.

The assessee should furnish a certificate from a medical board constituted by

either the Central or the State Government, along with the return of income
for the year for which the deduction is claimed.
Donations

Section 80G

For the Assessment Year 2009-10

Donations to electoral trusts to be allowed as a 100 percent deduction in the

computation of the income of the donor.

For the Assessment Year 2006-07

Under this section deduction is made in respect of donations to certain funds,

charitable institutions, etc. Deduction is not available for donations given in
kind.

The deduction is available only for the entity to which donations is made is an
approved charitable institution by the government. A receipt of the institute, in
evidence made, should be attached to the return of income.

Section 80GG
Under this section a non-salaried person or a salaried person, if, not getting
house rent allowance, he/she can claim to the deduction for the rent he pays
for a residential accommodation. The deduction available is least of the
following:

 Rent paid in excess of 10 per cent of total income.

 25 per cent of total income.
 Rs 2,000 per month.
The total income of the individual is computed after reducing the
amount deductible under other sections, receipts exempt from tax,
and long-term & short-term capital gains taxable at concessional
rates.

The deduction is not available if the assessee or his spouse or minor

child owns the accommodation in which he stays or works, or carries
on his business or profession. Deduction is even not allowed, if the
assessee owns a house in any other place, and the concession in
respect of self-occupied house is claimed by him.

Section 80GGA
An individual, who is not engaged in any business or profession, is
eligible for a deduction of the amount donated to certain institutions
engaged in scientific research, rural development, etc.

Section 80GGC
It is the deduction in respect of contributions given by any person to
political parties. An individual shall be allowed to a deduction of any
amount contributed by him to a political party
SALIENT FEATURES

 Convenience of filing taxes online

Gone are the days of making an appointment with your accounting
office and waiting around while they punch a calculator in between
asking for your signature.
You can file online from anywhere. Web-based tax programs only
require an internet connection and therefore make everywhere your
tax office. Even with locally downloaded programs, taxes can still be
filed anywhere you take that computer.
The step-by-step programs give users the confidence that they’re not
missing anything and won’t be subject to any penalties for inaccuracy.
You can even start filing, get as far as your time allows, save what
you’ve already done and return to it at a later time. All in all, filing
online is just more convenient.

 Electronic records of tax forms

It’s best practice to keep records of your taxes up to seven years out.
Throwing out old tax records can be risky, though, and open you up
for identity theft if they’re not disposed of properly. On the other
hand, that stack of past taxes will continue to grow and grow each
year, taking up more and more space. Fingers crossed for no floods or
fires.
E-filing allows you to keep as many years of history as you want,
stored securely online and not taking up any physical space in drawers
or folders. This makes information easy to retrieve when you need it.

 Faster processing
Everything processes faster when you file online. You won’t have to
read the instructions for each form you’re filing and determine which
number goes in which box. E-filing asks simple and intuitive
questions, makes it clear where to input information and fills out the
proper forms on its own in the back-end.
Electronic signatures even make it so that you don’t have to write
your name a million times in order to file. Simply draw your signature
on your device’s trackpad, and then copy and paste it when indicated
to do so.
Beyond the time that you spend in front of your computer actually
filing your tax returns, completing them online also means that the
information gets passed on the back-end faster, as well. As soon as
you finish your end, that information is sent directly to the IRS
immediately. This eliminates any wait-time for the postal service to
deliver the documents, the IRS mail room to sort them and then
eventually get them to someone who can approve them.
It also means that, if you get a refund, you’ll get that back faster as
well. Not only because the tax return information can be processed
more quickly, but also because features like direct deposit make it so
that your tax refunds are automatically wired to your bank account, as
opposed to being at the mercy of the postal service and having to wait
for a physical check.

 Accuracy of filing taxes online

The most important part about filing taxes is accuracy. Giving
incomplete or incorrect information to the IRS can result in hefty
fines, penalties and even jail time. Filing online ensures that, as long
as the information you input is accurate, the forms sent to the IRS will
be accurate.
In many cases, the e-filing program has an accuracy guarantee where,
if there are any mistakes, they have the responsibility of correcting
them and incurring any fees.

 More money for your tax refund

One of the main advantages of e-filing taxes is that tax programs, like
TaxSlayer, are built to save you the most money. TaxSlayer looks for
deductions and tax breaks that you qualify for and suggests them to
you before finishing. In many cases, people learn that they qualify for
additional savings by using TaxSlayer which not only saves them
money on their tax returns but also finds opportunities to boost your
tax refund
STATEMENT OF PROBLEM
1. Complicated software

E-filing is an easy task for trained professionals or tax agents.

However, the use of e-filing software is not taught everywhere
and hence can be complicated to use for tax-paying units that file
their own taxes without using the services of a tax agent or a
trained professional.

Additionally, since it is a relatively new process, the knowledge of

e-filing is not widespread. Not many individual tax-paying units
are aware of the knows-and-how’s of the e-filing process.

2. Security

E-filing involves a tax filer to put their faith in the security of their
internet connection, the software, the hard disk with data, etc.
Still, electronic systems are not short of security breaches.

The process involves the storage of highly sensitive financial data

electronically. A hard disk crash could lose all data; an unethical
hack could potentially make one incur massive losses, and so on.
Security is one of the biggest concerns that come with e-filing.

NEED OF STUDY:

There may be changes in the slab rate of tax returns

every year or when there is change in government policies. The user
should be known about the current rates and taxes. The tax payer
should know the detail knowledge of filing income tax returns and
also about the amendments made on the rules and slab rate of taxes.
The tax payer should know how to file income tax return online
through internet. The tax payer should know the documents required
and the things required in filing income tax such as digital signatures
by chartered accountant which is mandatory

RELEVANCE AND IMPORTANCE OF STUDY:

Filing of return provides legality to what we are earning whether

we are paying tax on it or not. Prompt payment of taxes and filing
of returns is less likely to attract attention of the IT Department.

 A mandatory concept has been introduced for every person

to file his return even if it is below the exemption limit, no
matter what. Hence is important for every person to pay
tax accordingly.
 Any transaction can be legally entered into because the
government is having records of the income and it is
collecting tax on it.
 Payment of taxes helps every citizen to participate in the
contribution towards national income and consequently in
the appraisal of the national economy. Hence it is a
contribution towards our country by every person by
paying tax.
 Willful evasion of tax or intentional avoidance would lead to
prosecution by IT Department.
 If a person accrues losses in his business, he cannot carry it
forward to set off against his income in the next year if he
does not file his return for the relevant previous year.
ASSUMPTIONS:

 E-Filing is adopted by every company and every company file

income tax with internet filing.
 The respondent selected by me is having well knowledge about
their field of income tax filing of return.
 The respondent will give correct answer of every question and
query asked to them.
TYPES OF E-FILING

 There are three ways to file returns electronically.

 Option 1: Use digital signature, in which case no further

action is required.
 Option 2: File without digital signature, in which case ITR-V
form is to be filed with the department. This is a single page
receipt cum verification form.
 Option 3: File through an e-return intermediary who would
do eFiling and also assist the Assessee file the ITR -V Form.
Documents required for e-filing

• Form No. 16 (for Tax deducted by employers)

• Form No. 16A

• Account statements of bank accounts

• Property details

• Sale and purchase of investments / assets

• Details of tax payments made

• PAN card photo copy

• Birth date

• TAN number

• Bank A/c no

• Bank details – MICR code, Type of A/c.

PROCESS OF E-FILING
 12 Step Process for Filing Tax Returns

Whether you wish to go in for the quick e-filing process or manually

file your income tax returns, here is a helpful guide to assist you in
completing and submitting this vital document by yourself.

1) Go to the website http://www.incometaxindia.gov.in/

2) Click the link eFile Income Tax Return at the top left corner of the home
page

3) Select the Correct Form - There are two income tax forms for salaried
individuals. ITR-1 is for those who derive their income from salary, pension or
interest while ITR-2 is for income from capital gains, house property and other
sources. Those who wish to submit their tax returns manually may download
the pdf forms - External website that opens in a new window from here. These
forms need to be printed, filled by hand and signed before submitting to your
local income tax office.

For Individuals, HUF (Hindu Undivided Families)

 Select appropriate Income Tax ITR-1 ITR-2 ITR-3 ITR-4
Return (ITR) Preparation Software
Individual Individual Individual Individual

& HUF & HUF & HUF

1 Income from
▪ ▪ ▪ ▪
Salary/Pension

2 Income from Other

Sources (only Interest
▪ ▪ ▪ ▪
income or Family
Pension)

3 Income/Loss from
▪ ▪ ▪
Other Sources

4 Income/Loss from
▪ ▪ ▪
House Property

5 Capital Gains/Loss on
sale of ▪ ▪ ▪
investments/property

6 Partner in a
▪ ▪
partnership Firm

7 Income from
Proprietary ▪
Business/Profession

Select appropriate type of Return Form ITR 1 to ITR 8

For Association of Persons (AoP), Body of Individuals (BoI), Local Authority, Companies, Trusts,
Fringe Benefit Tax (FBT) Return
Select appropriate Income Tax ITR-5 ITR-6 ITR-7 ITR-
Return (ITR) Preparation 8
Software
Firms, Companies Trusts Only
AoP, FBT
BoI,
LA

1 Income/Loss from
▪ ▪ ▪
Other Sources

2 Income/Loss from
House Property ▪ ▪ ▪

3 Capital Gains/Loss on
sale of ▪ ▪ ▪
investments/property

4 Income/Loss from
▪ ▪ ▪
Business

5 Fringe Benefit Tax

▪ ▪ ▪ ▪
WHO CAN USE WHICH FORM?

ITR-1

This Form can be used by an individual whose total income during

the previous year i.e., financial year 2008-09 includes income
chargeable to income-tax under the head “salaries” or income in the
nature of family pension as defined in the Explanation to clause (iia)
of section 57 but does not include any other income except income
by way of interest chargeable to income-tax under the head “income
from other sources”. There should not be any exempt income other
than agriculture income and interest income. It may please be noted
that a person who is entitled to use this form shall not use Form ITR-
2. Further, a person in whose income the income of other person like
his/ her spouse, minor child, etc. is to be clubbed is also not entitled
to use this form.

ITR-2

This Form can be used by an individual or a Hindu Undivided family

whose total income does not include any income chargeable to
income-tax under he heads “Profits or gains of business or
profession”. It may please be noted that a person who is entitled to
use Form ITR-1 shall not use this form. Further, a person who is
partner in a firm is required to use Form ITR-3. In case a partner in
the firm does not have any income from the firm by way of interest,
salary, etc. and has only exempt income by way of share in the profit
of the firm shall not use Form ITR-2.

ITR-3

This Form can be used a person being an individual or a Hindu

Undivided family who is a partner in a firm and where income
chargeable to income-tax under the head “Profits or gains of
business or profession” does not include any income except the
income by way of any interest, salary, bonus, commission or
remuneration, by whatever name called, due to, or received by him
from such firm. In case a partner in the firm does not have any
income from the firm by way of interest, salary, etc. and has only
exempt income by way of share in the profit of the firm shall use this
form only and not Form ITR-2.

ITR-4

This Form can be used by a person being an individual or a Hindu

Undivided family who is carrying out a proprietary business or
profession.

ITR-5

This Form can be used a person being a firm, AOP, BOI, artificial
juridical person referred to in section 2(31)(vii), cooperative society
and local authority. However, a person who is required to file the
return of income under section 139(4)(a) or 139(4)(a) or 139(4)(b) or
139(4)(c) or 139(4)(d) shall not use this form.

ITR-6

This Form can be used by a company, other than a company claiming

exemption under section 11

ITR-7

This Form can be used by persons including companies who are

required to furnish return under section 139(4A) or under section
139(4B) or under section 139(4C) or under section 139(4D).

ITR-8

This Form is applicable in case of a person who is not required to

furnish the return of income but is required to furnish the return of
fringe benefits

4) Use of Return Preparation Software - Those citizens who wish to

avail the e-filing system need to download the Return Preparation
Software - External website that opens in a new window for each ITR
form. This software is an excel file that requires one to type in
personal details as well as financial information from TDS certificates,
bank statements, deductions made and interest statements.
5) Generating an XML file - After keying in the details, check once for
accuracy. After you are satisfied, click the 'Generate' button to create
your tax return in XML format. This format helps in sharing of
structured data across different information systems. Save this XML
file on your computer.

6) Register - The next step requires you to Register at the Income Tax
website - External website that opens in a new window. Your
registered Permanent Account Number (PAN card) has to be entered
as your username.

7) Login - After registering, enter your user id and password to login.

Click on the relevant form on the left panel and select 'Submit
Return'.

8) Upload XML - Browse to select the XML file, which you had
generated and saved in Step 3. Click on the 'Upload' button to upload
the file.

9) Acknowledgement - After the file is successfully uploaded,

acknowledgement details or the ITR-V Form will be displayed. Take a
printout of this acknowledgement for your records.
10) Digital Signature - If your income tax return was digitally signed,
then no further paperwork or visit to the income tax office is needed.
Here is some information about how to get a digital signature -
External website that opens in a new window.

Instructions for filling up FORM ITR-V

1. Rule 12(3)(iii) of the Income-tax Rules, 1962 provides that any

assessee can file a return of income electronically without the use of
a digital signature. In such cases only an acknowledgement needs to
be filed with the Department physically by the assessee.

2. Once a return of income is filed electronically on successful

transmission of the data, Form ITR-V duly filled shall be generated by
the Income-tax Department’s server to the assessee. This ITR-V will
also contain the acknowledgement number of electronic
transmission and the date of the transmission as evidence of filing
for the benefit of the assessee. Please down load a copy of such duly
filled Form and verify under your signature in the space provided. In
case the return was prepared by a Tax Return Preparer (TRP), the
particulars of TRP be also filled and this verification form be
countersigned by the TRP.

3. This acknowledgement in Form ITR-V duly signed by the assessee

needs to be filed physically (in duplicate) with the concerned
Assessing Officer. One copy of this acknowledgement would be
returned back to the assessee for his record.

4. The codes for the form number and the status of the assessee
shall be generated electronically by the Department’s server.

11) Verification - If your return is not digitally signed, then you need
to print and fill up the verification part of the acknowledgement cum
verification form (ITR-V). This has to be signed and submitted to the
local Income Tax Office within 15 days to complete the e-filing
process
12) Additional Assistance - In case you require any more help in
filing the paper copy of the return, please contact the Public
Relations Officer at your local Income Tax Office. One may also
phone the Aayakar Sampark Kendra (ASK) call center at 124-2438000
or email at [email protected].
SUMMARY OF LEARNINGS EXPERIENCE

• To get initial success in this field is very difficult. Although the

business generation becomes easier with time as we serve more
people who then get added up in the loyal clientage. Thus, time and
service are two most factors to get in this field.

• Also, the corporate remains a very important segment which gets

business in bulk but retail cannot be ignored which makes your
business ticking.

• Customer remains in the pivotal position.

CONCLUSION:

Under the umbrella of my project, we the participants of this project

were glad to understand the design and pattern of income tax e-
filing online. My experience with the various customers of the
various companies was totally different and gave us an edge adding
to my knowledge.
BIBLIOGRAPHY:

Websites:

www.incometaxindiaefiling.gov.in

www.valueplus.njfundz.com

www.incometaxindia.gov.in

www.legalserviceindia.com

www.finance.indiamart.com